Case E When The Subsidiary Leads Expansion: From Russia to Belarus and Beyond

Purpose This case study presents the challenges and opportunities faced by a Russian-based firm in terms of expansion to neighboring emerging markets. The case reviews the efforts of a large Russian-based business-to-business firm, which is the leader in the field of fire production gear and equipment, both in manufacturing and sales, and has recently expanded their operations into the neighboring country of Belarus. Methodology/approach The case examines the initial decision to expand to Belarus and what types of risks were assessed prior to entry. Included in the case is a review of the background of the company under consideration, including their history in Russia and how the company addressed the managerial problem of: Why should the company decide to penetrate a foreign market? Findings The study documents and highlights those variables and critical decisions that needed to be made prior to entry, and which items proved to be the most straightforward; those that resulted in the greatest challenge; and those that were highly unexpected. Practical implications The case demonstrates that the form of penetration strategy selected by a firm operating in this region must balance the breadth of stakeholder interests. The two theoretical frameworks; international expansion strategy; stakeholder balance strategy illustrate how a firm can benefit from the proper integration of these theories within the existing resources of the firm. Additionally, the case provides a potential prescription in terms of how to best select a future country for expansion. Originality/value By analyzing a firm that has successfully operated in Russia, and has expanded internationally to another emerging market, Belarus, contributes to the limited existing literature that has applied international strategic theories to actual international practice.